Exhibit 99.1
For more information, contact:
Ronald L. Smith
Chief Financial Officer
(336) 316-5545
Ronald L. Smith
Chief Financial Officer
(336) 316-5545
Unifi Announces Third Quarter Results
GREENSBORO, N.C. — April 27, 2011 — Unifi, Inc. (NYSE:UFI) today released preliminary
operating results for its third quarter ended March 27, 2011. Net sales increased $23 million, or
15 percent, to $178 million for the March 2011 quarter compared to net sales of $155 million for
the prior year quarter. The Company reported a net loss for the third quarter of its 2011 fiscal
year of $4.0 million, or $0.20 per share, compared to net income of $0.8 million, or $0.04 per
share, for the prior year quarter. Earnings for the March 2011 quarter included approximately $2.2
million of charges related to the early extinguishment of debt and a loss of $2.5 million from our
investment in Parkdale America, LLC. (“Parkdale America”), which compares to $2.0 million of income
from Parkdale America in the prior year March quarter.
For the first nine months of the fiscal year 2011, the Company reported net income of $11.6
million, or $0.58 per share, compared to net income of $5.2 million, or $0.26 per share, for the
prior year period. Net sales increased $73 million, or 17 percent, to $513 million for the fiscal
year-to-date compared to net sales of $440 million for the prior year period.
Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) for
the March 2011 quarter were $12.3 million compared to adjusted EBITDA of $12.7 million for the
prior year quarter. Adjusted EBITDA for the first nine months of fiscal year 2011 was $46.4 million
compared to $41.1 million for the prior year period.
Unifi Announces Third Quarter Results — page 2
“During the March quarter, polyester raw material prices rose significantly,” said Bill
Jasper, Chairman and CEO of Unifi. “Certain quarterly pricing commitments and our strategic
decision to absorb a portion of the raw material cost increases during the March quarter resulted
in temporary margin pressure. Since the end of the quarter, we have recovered most of the lost
margin and our business fundamentals remain strong.” Mr. Jasper also noted, “Year-over-year volume
continued to improve in our polyester business based upon retail sales improvements that are
nearing pre-recession levels; continued growth of our business in China; and startup of our
operations in Central America, a region which continues to develop and increase its share of the
U.S. apparel market. In addition, sales of the Company’s Premier Value Added products are on track
to meet our stated goal of doubling over the next three years.”
Working capital usage during the quarter combined with elevated strategic capital expenditures
to complete the Company’s new REPREVE® Recycling Center resulted in a $14 million
decrease in cash-on-hand from the end of December 2010, to $19.1 million as of the end of March
2011. During the quarter, the Company also redeemed $30 million of its senior secured notes, due
May 2014, reducing the amount of outstanding notes to $133.7 million. Outstanding borrowings on the
Company’s revolving credit facility at the end of the March quarter were $37.8 million.
“Raw material cost increases also had a significant effect on our investment in working
capital during the quarter,” said Ron Smith, Chief Financial Officer of Unifi. “The volume increase
over the last several quarters, coupled with the higher raw material costs and related selling
prices increases, resulted in the Company investing an additional $24 million in working capital
during the quarter.”
“At Parkdale America, considerably higher cotton prices are also having a substantial effect,”
said Bill Jasper. “With cotton prices at record highs, we understand that Parkdale America has
worked to develop and implement appropriate plans to ensure availability of competitively priced
cotton and recoup the lost margins.”
-continued-
Unifi Announces Third Quarter Results — page 3
The financial statements included in this press release have been retroactively adjusted to
reflect the Company’s one-for-three reverse stock split, which became effective November 3, 2010.
The Company will host a conference call and web cast at 8:30 a.m. (Eastern Daylight Time) on
April 28, 2011, to discuss the preliminary results for the third quarter of fiscal year 2011. The
conference call can be accessed by dialing (888) 679-8038 (Domestic) or (617) 213-4850
(International), and entering conference number 29947263. Participants may pre-register for the
conference call at https://www.theconferencingservice.com/prereg/key.process?key=PDWH76AUE. There
will also be a live audio web cast of the call, which may be accessed on the Company’s website at
http://www.unifi.com/ or http://investor.unifi.com/. Following management’s comments, there will be
an opportunity for questions from the financial community.
A replay will be made available approximately two hours after the conclusion of the call. The
replay can be accessed by dialing (888) 286-8010 (Domestic) or (617) 801-6888 (International) and
entering the passcode 68679419. This replay line will be available through May 5, 2011. In
addition, a replay of the web cast will also be available on the Company’s website under the
“Investor Relations” section and archived for up to twelve months following the call, as will a
transcript of the conference call.
Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of multi-filament polyester
and nylon textured yarns and related raw materials. The Company adds value to the supply chain and
enhances consumer demand for its products through the development and introduction of branded yarns
that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but
are not limited to: AIO® — all-in-one performance yarns, SORBTEK®,
A.M.Y.®, MYNX® UV, REPREVE®, REFLEXX®,
MICROVISTA® and SATURA®. Unifi’s yarns and brands are readily found in home
furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and
medical applications. For more information about Unifi, visit www.unifi.com, or to learn more about
REPREVE®, visit www.repreve.com.
###
Financial Statements to Follow
Unifi Announces Third Quarter Results — page 4
UNIFI, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
| March 27, 2011 | June 27, 2010 | |||||||
| (Unaudited) | ||||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 19,142 | $ | 42,691 | ||||
Receivables, net |
104,665 | 91,243 | ||||||
Inventories |
136,715 | 111,007 | ||||||
Income taxes receivable |
383 | — | ||||||
Deferred income taxes |
2,126 | 1,623 | ||||||
Other current assets |
6,216 | 6,119 | ||||||
Total current assets |
269,247 | 252,683 | ||||||
Property, plant and equipment, net |
152,845 | 151,499 | ||||||
Intangible assets, net |
12,235 | 14,135 | ||||||
Investments in unconsolidated affiliates |
89,854 | 73,543 | ||||||
Other non-current assets |
9,051 | 12,605 | ||||||
| $ | 533,232 | $ | 504,465 | |||||
Liabilities and Shareholders’ Equity |
||||||||
Accounts payable |
$ | 48,352 | $ | 40,662 | ||||
Accrued expenses |
18,473 | 21,725 | ||||||
Income taxes payable |
709 | 505 | ||||||
Current portion of notes payable |
— | 15,000 | ||||||
Current
maturities of long-term debt and other liabilities |
459 | 327 | ||||||
Total current liabilities |
67,993 | 78,219 | ||||||
Notes payable, less current portion |
133,722 | 163,722 | ||||||
Long-term debt and other liabilities |
40,619 | 2,531 | ||||||
Deferred income taxes |
384 | 97 | ||||||
Shareholders’ equity |
290,514 | 259,896 | ||||||
| $ | 533,232 | $ | 504,465 | |||||
-continued-
Unifi Announces Third Quarter Results — page 5
UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Amounts in Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Amounts in Thousands, Except Per Share Data)
| For the Quarters Ended | For the Nine-Months Ended | |||||||||||||||
| March 27, 2011 | March 28, 2010 | March 27, 2011 | March 28, 2010 | |||||||||||||
Summary of Operations: |
||||||||||||||||
Net sales |
$ | 178,164 | $ | 154,687 | $ | 512,986 | $ | 439,793 | ||||||||
Cost of sales |
163,017 | 138,177 | 457,595 | 386,541 | ||||||||||||
Restructuring charges |
9 | 254 | 1,555 | 254 | ||||||||||||
Write down of long-lived assets |
— | — | — | 100 | ||||||||||||
Selling, general & administrative expenses |
10,344 | 11,252 | 32,223 | 34,568 | ||||||||||||
Provision (benefit) for bad debts |
41 | (105 | ) | 86 | (93 | ) | ||||||||||
Other operating (income) expense , net |
158 | (346 | ) | 417 | (542 | ) | ||||||||||
Non-operating (income) expense: |
||||||||||||||||
Interest income |
(584 | ) | (775 | ) | (1,995 | ) | (2,355 | ) | ||||||||
Interest expense |
5,016 | 5,697 | 15,347 | 16,412 | ||||||||||||
Other non-operating expense |
78 | — | 528 | — | ||||||||||||
Loss (gain) on extinguishment of debt |
2,193 | — | 3,337 | (54 | ) | |||||||||||
Equity in losses (earnings) of unconsolidated affiliates |
2,103 | (2,175 | ) | (11,887 | ) | (5,847 | ) | |||||||||
Income (loss) from operations before income taxes |
(4,211 | ) | 2,708 | 15,780 | 10,809 | |||||||||||
Provision (benefit) for income taxes |
(166 | ) | 1,937 | 4,205 | 5,596 | |||||||||||
Net income (loss) |
$ | (4,045 | ) | $ | 771 | $ | 11,575 | $ | 5,213 | |||||||
Earnings (loss) per share: |
||||||||||||||||
Income (loss) per common share — basic |
$ | (0.20 | ) | $ | 0.04 | $ | 0.58 | $ | 0.26 | |||||||
Income (loss) per common share — diluted |
$ | (0.20 | ) | $ | 0.04 | $ | 0.57 | $ | 0.25 | |||||||
Weighted average shares outstanding — basic |
20,069 | 20,057 | 20,062 | 20,414 | ||||||||||||
Weighted average shares outstanding — diluted |
20,069 | 20,274 | 20,477 | 20,518 | ||||||||||||
-continued-
Unifi Announces Third Quarter Results — page 6
UNIFI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Amounts in Thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Amounts in Thousands)
| For the Nine-Months Ended | ||||||||
| March 27, 2011 | March 28, 2010 | |||||||
Cash and cash equivalents at beginning of year |
$ | 42,691 | $ | 42,659 | ||||
Operating activities: |
||||||||
Net income |
11,575 | 5,213 | ||||||
Adjustments to reconcile net income to net cash (used in) provided by
operating activities: |
||||||||
Earnings of unconsolidated affiliates, net of distributions |
(7,568 | ) | (4,236 | ) | ||||
Depreciation |
17,664 | 17,204 | ||||||
Amortization |
2,636 | 3,454 | ||||||
Stock-based compensation expense |
624 | 1,836 | ||||||
Deferred compensation expense |
504 | 463 | ||||||
Loss on asset sales |
242 | 953 | ||||||
Loss (gain) on extinguishment of debt |
3,337 | (54 | ) | |||||
Write down of long-lived assets |
— | 100 | ||||||
Restructuring charges |
— | 254 | ||||||
Deferred income tax |
(63 | ) | (449 | ) | ||||
Provision (benefit) for bad debts |
86 | (93 | ) | |||||
Other |
157 | 268 | ||||||
Change in assets and liabilities, excluding effects of
foreign currency adjustments |
(30,607 | ) | (4,089 | ) | ||||
Net cash (used in) provided by operating activities |
(1,413 | ) | 20,824 | |||||
Investing activities: |
||||||||
Capital expenditures |
(17,334 | ) | (7,963 | ) | ||||
Investment in unconsolidated affiliates |
(707 | ) | (550 | ) | ||||
Return of capital from unconsolidated affiliate |
500 | — | ||||||
Change in restricted cash |
— | 5,776 | ||||||
Proceeds from sale of capital assets |
189 | 1,393 | ||||||
Proceeds from split dollar life insurance surrenders |
3,241 | — | ||||||
Other |
— | (246 | ) | |||||
Net cash used in investing activities |
(14,111 | ) | (1,590 | ) | ||||
Financing activities: |
||||||||
Payments of notes payable |
(47,588 | ) | — | |||||
Payments of other long-term debt |
(105,325 | ) | (6,211 | ) | ||||
Borrowings of other long-term debt |
143,125 | — | ||||||
Proceeds from stock option exercises |
118 | — | ||||||
Purchase and retirement of Company stock |
(2 | ) | (4,995 | ) | ||||
Debt refinancing fees |
(825 | ) | (381 | ) | ||||
Other |
(364 | ) | — | |||||
Net cash used in financing activities |
(10,861 | ) | (11,587 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents |
2,836 | 2,190 | ||||||
Net (decrease) increase in cash and cash equivalents |
(23,549 | ) | 9,837 | |||||
Cash and cash equivalents at end of period |
$ | 19,142 | $ | 52,496 | ||||
continued-
Unifi Announces Third Quarter Results — page 7
Adjusted EBITDA Reconciliation
to Net Income
(Amounts in Thousands)
(Unaudited)
to Net Income
(Amounts in Thousands)
(Unaudited)
| For the Quarters Ended | For the Nine-Months Ended | |||||||||||||||
| March 27, | March 28, | March 27, | March 28, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) |
$ | (4,045 | ) | $ | 771 | $ | 11,575 | $ | 5,213 | |||||||
Provision (benefit) for income taxes |
(166 | ) | 1,937 | 4,205 | 5,596 | |||||||||||
Interest expense, net |
4,432 | 4,922 | 13,352 | 14,057 | ||||||||||||
Depreciation and amortization expense |
6,599 | 6,485 | 19,564 | 19,829 | ||||||||||||
Equity in losses (earnings) of unconsolidated affiliates |
2,103 | (2,175 | ) | (11,887 | ) | (5,847 | ) | |||||||||
Non-cash compensation expense, net of distributions |
392 | 683 | 1,095 | 2,299 | ||||||||||||
Loss on sales or disposals of PP&E |
189 | 1,010 | 242 | 953 | ||||||||||||
Currency and derivative (gains) losses |
(14 | ) | 61 | 296 | (59 | ) | ||||||||||
Write down of long-lived assets |
— | — | — | 100 | ||||||||||||
Loss (gain) on extinguishment of debt and other
non-operating expense |
2,271 | — | 3,865 | (54 | ) | |||||||||||
Restructuring charges |
9 | 254 | 1,555 | 254 | ||||||||||||
Gain from sale of nitrogen credits |
— | (1,400 | ) | — | (1,400 | ) | ||||||||||
Startup costs |
502 | 167 | 2,540 | 167 | ||||||||||||
Adjusted EBITDA |
$ | 12,272 | $ | 12,715 | $ | 46,402 | $ | 41,108 | ||||||||
-continued-
Unifi Announces Third Quarter Results — page 8
NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
Included in this presentation are certain non-GAAP financial measures designed to complement
the financial information presented in accordance with generally accepted accounting principles in
the United States of America (“GAAP”) because management believes such measures are useful to
investors.
Adjusted EBITDA
Adjusted EBITDA represents net income or loss before income tax expense, net interest expense,
and depreciation and amortization expense (excluding interest portion of amortization), adjusted to
exclude equity in earnings and losses of unconsolidated affiliates, non-cash compensation expense
net of distributions, gains or losses on sales or disposals of property, plant and equipment,
currency and derivative gains or losses, write down of long-lived assets, gains or losses on
extinguishment of debt and other non-operating expense, restructuring charges, gain from sales of
nitrogen credits, and startup costs. We present Adjusted EBITDA as a supplemental measure of our
operating performance and ability to service debt. We also present Adjusted EBITDA because we
believe such measure is frequently used by securities analysts, investors and other interested
parties in the evaluation of companies in our industry and in measuring the ability of “high-yield”
issuers to meet debt service obligations.
Adjusted EBITDA is an alternative view of performance used by management and we believe that
investors’ understanding of our performance is enhanced by disclosing this performance measure. Our
management uses Adjusted EBITDA: (i) as a measurement of operating performance because it assists
us in comparing our operating performance on a consistent basis as it removes the impact of (a)
items directly related to our asset base (primarily depreciation and amortization) and (b) unusual
items that we would not expect to occur as a part of our normal business on a regular basis; (ii)
for planning purposes, including the preparation of our annual operating budget; (iii) as a
valuation measure for evaluating our operating performance and our capacity to incur and service
debt, fund capital expenditures and expand our business; and (iv) as one measure in determining the
value of other acquisitions and dispositions. Adjusted EBITDA is also a key performance metric
utilized in the determination of variable compensation.
We believe that the use of Adjusted EBITDA as an operating performance measure provides
investors and analysts with a measure of operating results unaffected by differences in capital
structures, capital investment cycles, and ages of related assets, among otherwise comparable
companies. We also believe Adjusted EBITDA is an appropriate supplemental measure of debt service
capacity, because cash expenditures on interest are, by definition, available to pay interest, and
tax expense is inversely correlated to interest expense because tax expense decreases as deductible
interest
expense increases; depreciation and amortization are non-cash charges. Equity in earnings and
losses of unconsolidated affiliates is excluded because such earnings or losses do not reflect our
operating performance. The other items excluded from Adjusted EBITDA are excluded in order to
better reflect the performance of our continuing operations.
In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses
similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be unaffected by unusual or non-recurring
items. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not
be considered as an alternative to net income, operating income or any other performance measures
derived in accordance with GAAP or as an alternative to cash flow from operating activities as a
measure of our liquidity.
-continued-
Unifi Announces Third Quarter Results — page 9
NON-GAAP FINANCIAL MEASURES
-continued-
-continued-
Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider
it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of
these limitations are:
• it does not reflect our cash expenditures, future requirements for capital expenditures or
contractual commitments;
• it does not reflect changes in, or cash requirements for, our working capital needs;
• it does not reflect the significant interest expense or the cash requirements necessary to
service interest or principal payments on our debt;
• although depreciation and amortization are non-cash charges, the assets being depreciated
and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does
not reflect any cash requirements for such replacements;
• it is not adjusted for all non-cash income or expense items that are reflected in our
statements of cash flows;
• it does not reflect the impact of earnings or charges resulting from matters we consider not
indicative of our on-going operations;
• it does not reflect limitations on or costs related to transferring earnings from our
subsidiaries to us; and
• other companies in our industry may calculate this measure differently than we do, limiting
its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered as a measure of
discretionary cash available to us to invest in the growth of our business or as a measure of cash
that will be available to us to meet our obligations, including those under our outstanding debt
obligations. You should compensate for these limitations by relying primarily on our GAAP results
and using Adjusted EBITDA only as supplemental information.
-continued-
Unifi Announces Third Quarter Results — page 10
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements within the meaning
of federal securities laws about the financial condition and results of operations of Unifi, Inc.
(the “Company”) that are based on management’s current expectations, estimates and projections
about the markets in which the Company operates, as well as management’s beliefs and assumptions.
Words such as “expects,” “anticipates,” “believes,” “estimates,” variations of such words and other
similar expressions are intended to identify such forward-looking statements. These statements are
not guarantees of future performance and involve certain risks, uncertainties and assumptions,
which are difficult to predict. Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which reflect
management’s judgment only as of the date hereof. The Company undertakes no obligation to update
publicly any of these forward-looking statements to reflect new information, future events or
otherwise.
Factors that may cause actual outcome and results to differ materially from those expressed
in, or implied by, these forward-looking statements include, but are not necessarily limited to,
availability, sourcing and pricing of raw materials, the success of our subsidiaries, pressures on
sales prices and volumes due to competition and economic conditions, reliance on and financial
viability of significant customers, operating performance of joint ventures, alliances and other
equity investments, technological advancements, employee relations, changes in construction
spending, capital expenditures and long-term investments (including those related to unforeseen
acquisition opportunities), continued availability of financial resources through financing
arrangements and operations, outcomes of pending or threatened legal proceedings, negotiation of
new or modifications of existing contracts for asset management and for property
and equipment construction and acquisition, regulations governing tax laws, other governmental
and authoritative bodies’ policies and legislation, and proceeds received from the sale of assets
held for disposal. In addition to these representative factors, forward-looking statements could be
impacted by general domestic and international economic and industry conditions in the markets
where the Company competes, such as changes in currency exchange rates, interest and inflation
rates, recession and other economic and political factors over which the Company has no control.
Other risks and uncertainties may be described from time to time in the Company’s other reports and
filings with the Securities and Exchange Commission.
-end-
